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Fannie Mae and Freddie Mac Announce LIBOR Replacement

January 11, 2023
In late-December 2022, Fannie Mae and Freddie Mac announced the SOFR (Secured Overnight Financing Rate) will serve as the index for their LIBOR-based adjustable rate loans. The announcement from the GSEs comes as no surprise as the Federal Reserve Board’s Adjustable Interest Rate (LIBOR) Act had recommended SOFR as the replacement index for LIBOR contracts […]

In late-December 2022, Fannie Mae and Freddie Mac announced the SOFR (Secured Overnight Financing Rate) will serve as the index for their LIBOR-based adjustable rate loans. The announcement from the GSEs comes as no surprise as the Federal Reserve Board’s Adjustable Interest Rate (LIBOR) Act had recommended SOFR as the replacement index for LIBOR contracts governed by U.S. law.

“Freddie Mac’s transition of existing LIBOR contracts to a new index rate will mark the conclusion of a long and consequential project to replace the index in those contracts,” said John Glessner, Freddie Mac senior vice president and head of the Investments and Capital Markets. “As this effort nears its completion, we thank the Alternative Reference Rates Committee convened by the Federal Reserve Board and our regulator, the Federal Housing Finance Agency, for their leadership.”

The transition to the replacement index will occur the day after June 30, 2023, the last date on which the Intercontinental Exchange, Inc. (ICE) Benchmark Administration Limited will publish a representative rate for LIBOR.

To review Fannie Mae’s announcement, please visit Fannie Mae Announces Replacement Rates for Legacy LIBOR Products

To review Freddie Mac’s announcement, please visit Freddie Mac Announces Replacement Rates for its Legacy LIBOR Contracts

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